Ship Deliveries Fell Short of Orders in 2010

More than 350 container ships were scheduled to enter the world fleet last year, but shipyards delivered only 290, London-based shipbroker Braemar Seascope said in a report.
Braemar Seascope said gaps between scheduled and actual deliveries of vessels in all three major shipping market segments – container, dry bulk and tanker – added a dose of stability to freight markets last year.
Reasons for the shortfall in deliveries included technical underperformance at certain shipyards and the fallout of the credit crunch and weak economy that led some buyers to cancel orders or renegotiate delivery dates, the report said.
In the container sector, 1.7 million TEUs of capacity, including 80 ships of over 7,500 TEUs, were scheduled to be delivered. Only 1.35 million TEUs joined the fleet, and capacity was further restrained by slow steaming and layups.
Additional shortfalls in deliveries are likely this year and will affect capacity, said Mark Williams, Braemar Seascope research manager, “That could make the difference between red and black ink in the accounts for many owners,” he said.
Some 1,400 dry bulk ships with total capacity of 113 million deadweight tons were scheduled for delivery last year but only 950 ships of 78 million dwt. were delivered. In the crude oil and oil products tanker sector, nearly 400 ships totaling 51 million dwt. were scheduled for delivery, but the actual numbers were 290 ships totaling 37 million dwt.

CMA CGM Ex-chief Returns As CEO
Jacques Saade, former CEO and founder of French shipping giant CMA CGM, has returned in force to the company he founded as its new chief executive. He had previously been reduced in rank by the banks and lenders during the time when the company was experiencing severe financial difficulties in restructuring a US$ 5 billion debt.
Since then the Turkish Yildrim Group has waded in with a US$ 500 million investment, while the shipping line’s fortunes appear to have made a remarkable turnabout in its trading, particularly in the container division.
“This investment enables the group to substantially strengthen its balance sheet and secure its investment plan, while providing additional funds to support expansion,” said CMA CGM while confirming Saade’s appointment.

Maersk raises 2011 container forecast
Danish shipping company AP Moller-Maersk has increased its 2011 container division forecast, made in November, from 6 percent growth to 8 percent.
“We don’t think we’ll lose any market share this year,” CEO Nils Andersen said at last week’s World Economic Forum in Davos, Switzerland, where he expressed confidence that Maersk would retain 14.4 percent of the global cellular fleet. This was after Maersk Line recorded heavy losses in 2009 during the economic downturn. Andersen later told Bloomberg that he expected a year of record profits after the 2009 losses damaged Maersk’s volumes.
Andersen recently said that AP Moller-Maersk was going to focus heavily on the developing world for its future growth, saying that the company is strong in Africa and has a good footprint in South America.

…As MOL Cuts Forecast Despite Container Profits
…Blames Weakness in bulk and tanker markets
Japanese shipping group MOL reported higher container shipping profit but cut its earnings forecast for its fiscal year ending March 31, citing weakness in bulk and tanker markets.
MOL reported $96 million operating profit from container shipping during its October-December fiscal third quarter, compared with a $138 million loss a year earlier.
For the current fiscal year’s first three quarters, container shipping drove an increase in group-wide net profit to $640 million from $21 million in the April to December period in 2009.
The company said the container shipping market continued its upward trend in the last three months of 2010 despite a seasonal slump in cargo volume. MOL raised its container shipping profit forecast for the full fiscal year 11.4 percent to $452 million.
Despite the container profits, MOL lowered its group-wide profit forecast for the full fiscal year to $693 million, down 12 percent from the most recent forecast last Oct. 29. Dry bulk demand “is falling” and “the pace of recovery in the tanker market is slow,” MOL said in its earnings release.
“After taking into consideration rises in bunker prices, the performance for full year 2010 is expected to be worse than the previously announced outlook,” the com

…But, BIMCO Says Ship Orders Returning to Normal
*Orders for container ships declined 21 percent over the last year
Orders for new container ships are returning to normal levels this year as orders decline 21 percent over the last year, according to a new report by BIMCO, an independent shipping association based in Copenhagen.
The report said the low level of new orders has brought the orderbook-to-fleet ratio down to 28 percent, which it said was the average ratio level until the ordering boom took off towards the end of 2003.
The orderbook-to-fleet ratio reached its peak in November 2007 at 61 percent. “The fact that the ratio is now back to normal, means that owners may again be considering to order, and if so, we hope – at a moderate pace,” BIMCO said.
It cautioned that shipowners must carefully consider new orders because of the massive overcapacity caused by new deliveries over the past few years just as demand plummeted as a result of the global financial crisis. The balance has been restored via the temporary idling of ships as well as slow-steaming, “but tonnage remains abundant,” it said.
BIMCO expects 1.6 million 20-foot equivalent units of capacity could be contracted in 2011, which it calls a normal flow of orders as owners anticipate a sustainable comeback of consumer spending in the U.S. and Europe that will produce growing demand for vessel space.
It said the signing of a series of 18,000 TEU vessels will not be followed by a massive flood of orders for such vessels.
“Expect an even more slow-going trend to materialize like the one that followed the launch of the first (more than) 10,000-TEU vessel; neither the supply or demand side of container shipping wish to see a more volatile market scenario,” the report said. “Port infrastructure may also have to be developed further to handle a possibly wider containership than ever seen before. Last but not least a price tag of $180 million is also a natural barrier to many ship owners.”

Ethiopian Shipping Lines Ordered Nine New Builds
Ethiopian Shipping Lines (ESL) has placed an order with Chinese shipyards for nine new vessels. The contract is said to be worth US$300 million and the Export-Import Bank of China is providing 80% of the finance.
Seven of the vessels will be 28,000-ton heavylift multipurpose ships building at Shandong Huanghai Shipbuilding and costing $32.5m each. The balance of two 41,500-ton tankers are to be built at the Jinling Shipyard costing $37 million each. Delivery is scheduled for between August 2012 and February 2014.
The newbuilds will replace six cargo ships of between 8,000 and 15,000 tons that were built between 1984 and 1990.
ESL has placed orders with Chinese shipyards on one previous occasion, when two multipurpose ships were built at the Kouan Shipyard. Both remain in service with the line. –